Understanding the pathogenesis of type 2 diabetes mellitus (DM-2) is critical for both prevention and the development of new treatments for the disease. Two defects, insulin resistance and a failure of the pancreatic beta-cell to adequately compensate for increased insulin demands by increasing insulin production and secretion, characterize this disease. The nature of this beta-cell defect is unknown for the majority of people with DM-2, although there is evidence that a defect in beta-cell gene expression may be involved. Recently, we have identified a defect in beta-cell gene expression in an animal model of DM-2, the ZDF rat. Although not yet fully characterized, our data demonstrate that the defect results in impaired insulin gene transcription by altering the function of several key promoter regulatory elements. Ultimately, the defect results in measurably lower insulin mRNA levels, but is insufficient to cause diabetes by itself. Only when combined with increased insulin resistance does the beta-cell defect result in diabetes, similar to human DM-2 The experiments proposed in this application will investigate the nature of the beta-cell defect in the ZDF rat. First, we will test for candidate transcription factors that may be responsible for the defect in beta-cell gene expression. Secondly, we will evaluate the mechanism by which insulin resistance unmasks the beta-cell defect, resulting in diabetes. We will specifically test the role of elevated free fatty acids on ZDF rat beta-cell function. We expect the studies proposed will identify the defect in beta-cell function that contributes to the development of DM-2 and identify the process by which insulin resistance unmasks defects in beta-cell function to result in overt diabetes. These studies will provide critical information regarding the interaction of the beta-cell and the insulin resistant state in the pathogenesis of DM-2, and identify candidates for human mutations causing type 2 diabetes mellitus.